(b) Explain how the process of developing scenarios might help John better understand the macro-environmental
factors influencing Airtite’s future strategy. (8 marks)
(b) Explain how the process of developing scenarios might help John better understand the macro-environmental
factors influencing Airtite’s future strategy. (8 marks)
(b) Analyse how effective project management could have further improved both the process and the outcomes
of the website re-design project. (10 marks)
4 Global Imaging is a fast growing high tech company with some 100 employees which aims to double in size over the
next three years. The company was set up as a spin out company by two research professors from a major university
hospital who now act as joint managing directors. They are likely to leave the company once the growth objective is
achieved.
Global Imaging’s products are sophisticated imaging devices facing a growing demand from the defence and health
industries. These two markets are very different in terms of customer requirements but share a related technology.
Over 90% of sales are from exports and the current strategic plan anticipates a foreign manufacturing plant being set
up during the existing three-year strategic plan. Current management positions are largely filled by staff who joined in
the early years of the company and reflect the heavy reliance on research and development to generate the products
to grow the business. Further growth will require additional staff in all parts of the business, particularly in
manufacturing and sales and marketing.
Paul Simpson, HR manager at Global Imaging is annoyed. This stems from the fact that HR is the one management
function not involved in the strategic planning process shaping the future growth and direction of the company. He
feels trapped in a role traditionally given to HR specialists, that of simply reacting to the staffing needs brought about
by strategic decisions taken by other parts of the business. He feels even more threatened by one of the joint managing
directors arguing that HR issues should be the responsibility of the line managers and not a specialist HR staff
function. Even worse, Paul has become aware of the increasing number of companies looking to outsource some or
all of their HR activities.
Paul wants to develop a convincing case why HR should not only be retained as a core function in Global Imaging’s
activities, but also be directly involved in the development of the current growth strategy.
Required:
Paul has asked you to prepare a short report to present to Global Imaging’s board of directors:
(a) Write a short report for Paul Simpson on the way a Human Resource Plan could link effectively with Global
Imaging’s growth strategy. (12 marks)
3 Clyde Williams is facing a dilemma. He has successfully built up a small family-owned company, Concrete Solutions
Ltd, manufacturing a range of concrete based products used in making roads, pavements and walkways. The
production technology is very low tech and uses simple wooden moulds into which the concrete is poured. As a
consequence he is able to use low skilled and low cost labour, which would find it difficult to find alternative
employment in a region with high unemployment levels. The company has employed many of its workforce since its
creation in 1996. The company’s products are heavy, bulky and costly to transport. This means its market is limited
to a 30-mile area around the small rural town where the manufacturing facility is located. Its customers are a mix of
private sector building firms and public sector local councils responsible for maintaining roads and pavements. By its
nature much of the demand is seasonal and very price sensitive.
A large international civil engineering company has recently approached Clyde with an opportunity to become a
supplier of concrete blocks used in a sophisticated system for preventing coast and riverbank erosion. The process
involves interlocking blocks being placed on a durable textile base. Recent trends in global warming and pressure in
many countries to build in areas liable to flooding have created a growing international market for the patented erosion
prevention system. Clyde has the opportunity to become the sole UK supplier of the blocks and to be one of a small
number of suppliers able to export the blocks to Europe. To do it he will need to invest a significant amount in CAM
(computer aided manufacturing) technology with a linked investment in the workforce skills needed to operate the
new technology. The net result will be a small increase in the size of the labour force but redundancy for a significant
number of its existing workers either unwilling or unable to adapt to the demands of the new technology. Successful
entry into this new market will reduce his reliance on the seasonal low margin concrete products he currently produces
and significantly improve profitability.
One further complication exists. Concrete Solutions is located in a quiet residential area of its home town. Clyde is
under constant pressure from the local residents and their council representatives to reduce the amount of noise and
dust created in the production process. Any move into making the new blocks will increase the pollution problems
the residents face. There is a possibility of moving the whole manufacturing process to a site on a new industrial estate
being built by the council in a rival town. However closure of the existing site would lead to a loss of jobs in the current
location. Clyde has asked for your help in resolving his dilemma.
Required:
(a) Using models where appropriate, advise Clyde on whether he should choose to take advantage of the
opportunity offered by the international company. (12 marks)
3 Local neighbourhood shops are finding it increasingly difficult to compete with supermarkets. However, three years
ago, the Perfect Shopper franchise group was launched that allowed these neighbourhood shops to join the group
and achieve cost savings on tinned and packaged goods, particularly groceries. Perfect Shopper purchases branded
goods in bulk from established food suppliers and stores them in large purpose-built warehouses, each designed to
serve a geographical region. When Perfect Shopper was established it decided that deliveries to these warehouses
should be made by the food suppliers or by haulage contractors working on behalf of these suppliers. Perfect Shopper
places orders with these suppliers and the supplier arranges the delivery to the warehouse. These arrangements are
still in place. Perfect Shopper has no branded goods of its own.
Facilities are available in each warehouse to re-package goods into smaller units, more suitable for the requirements
of the neighbourhood shop. These smaller units, typically containing 50–100 tins or packs, are usually small trays,
sealed with strong transparent polythene. Perfect Shopper delivers these to its neighbourhood shops using specialist
haulage contractors local to the regional warehouse. Perfect Shopper has negotiated significant discounts with
suppliers, part of which it passes on to its franchisees. A recent survey in a national grocery magazine showed that
franchisees saved an average of 10% on the prices they would have paid if they had purchased the products directly
from the manufacturer or from an intermediary – such as cash and carry wholesalers.
As well as offering savings due to bulk buying, Perfect Shopper also provides, as part of its franchise:
(i) Personalised promotional material. This usually covers specific promotions and is distributed locally, either using
specialist leaflet distributors or loosely inserted into local free papers or magazines.
(ii) Specialised signage for the shops to suggest the image of a national chain. The signs include the Perfect Shopper
slogan ‘the nation’s local’.
(iii) Specialist in-store display units for certain goods, again branded with the Perfect Shopper logo.
Perfect Shopper does not provide all of the goods required by a neighbourhood shop. Consequently, it is not an
exclusive franchise. Franchisees agree to purchase specific products through Perfect Shopper, but other goods, such
as vegetables, fruit, stationery and newspapers they source from elsewhere. Deliveries are made every two weeks to
franchisees using a standing order for products agreed between the franchisee and their Perfect Shopper sales
representative at a meeting they hold every three months. Variations to this order can be made by telephone, but only
if the order is increased. Downward variations are not allowed. Franchisees cannot reduce their standing order
requirements until the next meeting with their representative.
Perfect Shopper was initially very successful, but its success has been questioned by a recent independent report that
showed increasing discontent amongst franchisees. The following issues were documented.
(i) The need to continually review prices to compete with supermarkets
(ii) Low brand recognition of Perfect Shopper
(iii) Inflexible ordering and delivery system based around forecasts and restricted ability to vary orders (see above)
As a result of this survey, Perfect Shopper has decided to review its business model. Part of this review is to reexamine
the supply chain, to see if there are opportunities for addressing some of its problems.
Required:
(a) Describe the primary activities of the value chain of Perfect Shopper. (5 marks)
4 David Silvester is the founder and owner of a recently formed gift packaging company, Gift Designs Ltd. David has
spotted an opportunity for a new type of gift packaging. This uses a new process to make waterproof cardboard and
then shapes and cuts the card in such a way to produce a container or vase for holding cut flowers. The containers
can be stored flat and in bulk and then simply squeezed to create the flowerpot into which flowers and water are then
put. The potential market for the product is huge. In the UK hospitals alone there are 200,000 bunches of flowers
bought each year for patients. David’s innovative product does away with the need for hospitals to provide and store
glass vases. The paper vases are simple, safe and hygienic. He has also identified two other potential markets; firstly,
the market for fresh flowers supplied by florists and secondly, the corporate gift market where clients such as car
dealers present a new owner with an expensive bunch of flowers when the customer takes delivery of a new car. The
vase can be printed using a customer’s design and logo and creates an opportunity for real differentiation and impact
at sales conferences and other high profile PR events.
David anticipates a rapid growth in Gift Designs as its products become known and appreciated. The key question is
how quickly the company should grow and the types of funding needed to support its growth and development. The
initial financial demands of the business have been quite modest but David has estimated that the business needs
£500K to support its development over the next two years and is uncertain as to the types of funding best suited to
a new business as it looks to grow rapidly. He understands that business risk and financial risk is not the same thing
and is looking for advice on how he should organise the funding of the business. He is also aware of the need to avoid
reliance on friends and family for funding and to broaden the financial support for the business. Clearly the funding
required would also be affected by the activities David decides to carry out himself and those activities better provided
by external suppliers.
Required:
(a) Provide David with a short report on the key issues he should take into account when developing a strategy
for funding Gift Designs’ growth and development. (10 marks)
(b) Explain how Perfect Shopper might re-structure its upstream supply chain to address the problems identified
in the scenario. (10 marks)
(b) What advantages and disadvantages might result from outsourcing Global Imaging’s HR function?
(8 marks)
(c) Explain how Perfect Shopper might re-structure its downstream supply chain to address the problems
identified in the scenario. (10 marks)
(b) Using models where appropriate, what are likely to be the critical success factors (CSFs) as the business
grows and develops? (10 marks)
(b) Assuming that the acquisition proceeds, what steps will Datum Paper Products need to take to build a shared
culture in the two companies? (10 marks)